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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-CSR
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CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-8372
TRAVELERS SERIES FUND INC.
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(Exact name of registrant as specified in charter)
125 Broad Street, New York, NY 10004
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(Address of principal executive offices) (Zip code)
Robert I. Frenkel, Esq.
Smith Barney Fund Management LLC
300 First Stamford Place
Stamford, CT 06902
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(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 451-2010
Date of fiscal year end: OCTOBER 31
Date of reporting period: APRIL 30, 2004
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ITEM 1. REPORT TO STOCKHOLDERS.
The Semi-Annual Report to Stockholders is filed herewith.
TRAVELERS SERIES FUND INC.
SMITH BARNEY
AGGRESSIVE GROWTH PORTFOLIO
SMITH BARNEY
MID CAP CORE PORTFOLIO
SEMI-ANNUAL REPORT | APRIL 30, 2004
NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE
WHAT'S INSIDE
Letter from the Chairman............ 1
Schedules of Investments............ 5
Statements of Assets and Liabilities 14
Statements of Operations............ 15
Statements of Changes in Net Assets. 16
Notes to Financial Statements....... 18
Financial Highlights................ 23
LETTER FROM THE CHAIRMAN
[PHOTO]
R. Jay Gerken
R. JAY GERKEN, CFA
Chairman, President and Chief Executive Officer
Dear Shareholder,
Stock returns were mixed during the period. The broader market, as measured by
the S&P 500 Index,/i/ posted modest gains due to strong corporate earnings,
positive economic news and continued low interest rates. However, sluggish job
growth, high-energy prices, and geopolitical concerns made many investors
cautious about some sectors of the market. These conditions benefited some of
the more defensive industries, such as consumer staples and utilities, and
hampered some of last year's better-performing sectors, such as technology and
materials. In general, value stocks outperformed growth stocks for the
six-month period, while large-cap stocks generally outperformed small- and
mid-cap stocks.
In recent months, the economy has shown clear signs of improvement. We've seen
employment statistics finally beginning to accelerate and consumer spending has
continued to be strong. The cyclical upswing seems to be gathering momentum and
interest rates have bounced off the very low levels that were engendered by an
accommodative Federal Reserve. The market has recently come under significant
pressure as the fears of higher interest rates and a slowing economy in China
have curbed investors enthusiasm for equities in spite of positive earnings
surprises for the majority of companies.
Within this environment, the funds performed as follows on the next page:/1/
/1/The fund is an underlying investment option of various variable annuity
products. A variable annuity product is a contract issued by an insurance
company where the annuity premium (a set amount of dollars) is immediately
turned into units of a portfolio of securities. Upon retirement, the
policyholder is paid according to accumulated units whose dollar value
varies according to the performance of the securities within the sub
accounts. Its objective is to preserve, through investment, the purchasing
value of the annuity, which otherwise is subject to erosion through
inflation. The fund's performance returns do not reflect the deduction of
initial sales charges and expenses imposed in connection with investing in
variable annuity contracts such as administrative fees, account charges and
surrender charges, which if reflected, would reduce the performance of the
fund. Past performance is no guarantee of future results.
1 Travelers Series Fund Inc. | 2004 Semi-Annual Report
PERFORMANCE OF THE FUNDS
AS OF APRIL 30, 2004
6 Months
Smith Barney Aggressive Growth Portfolio 7.61%
Russell 3000 Growth Index 4.13%
Lipper Multi-Cap Growth Variable Funds Category Average 3.22%
Smith Barney Mid Cap Core Portfolio 2.75%
S&P MidCap 400 Index 6.93%
Lipper Mid-Cap Growth Variable Funds Category Average 3.15%
The performance shown represents past performance. Past performance is no
guarantee of future results and current performance may be higher or lower
than the performance shown above. Principal value and investment returns
will fluctuate and investors' shares, when redeemed, may be worth more or
less than their original cost.
The performance returns set forth above do not reflect the reduction of
initial charges and expenses imposed in connection with investing in
variable annuity contracts such as administrative fees, account charges and
surrender charges, which if reflected, would reduce the performance of the
funds.
All index performance reflects no deduction for fees, expenses or taxes. The
Russell 3000 Growth Index measures the performance of those Russell 3000
Index companies with higher price-to-book ratios and higher forecasted
growth values. The S&P MidCap 400 Index is a market-value weighted index
which consists of 400 domestic stocks chosen for market size, liquidity, and
industry group representation. Please note that an investor cannot invest
directly in an index.
Lipper, Inc. is a major independent mutual-fund tracking organization.
Returns are based on the six-month period ended April 30, 2004 and include
the reinvestment of dividends and capital gains, if any. Returns were
calculated among the 1,270 funds in the Lipper multi-cap growth variable
funds category. Returns were calculated among the 1,000 funds in the Lipper
mid-cap growth variable funds category.
Smith Barney Aggressive Growth Portfolio
For the six months ended April 30, 2004, the fund, returned 7.61%. The fund
performed better than the fund's unmanaged benchmark, the Russell 3000 Growth
Index,/ii/ which returned 4.13% for the same period. The fund also outperformed
the Lipper multi-cap growth variable funds category average, which returned
3.22%./2/
The portfolio outperformed its benchmark index due largely to sector
overweights and good stock selection in the healthcare and energy sectors, as
well as a significant underweight and good stock selection in the poorly
performing technology sector. In terms of individual holdings, the three
biggest positive contributors to portfolio performance were all in the
healthcare sector: biotechnology and biopharmaceutical firms Biogen Idec Inc.
and ImClone Systems Inc., and specialty pharmaceutical producer Forest
Laboratories,
/2/Lipper, Inc. is a major independent mutual-fund tracking organization.
Returns are based on the six-month period ended April 30, 2004, calculated
among the 1,270 funds in the fund's Lipper category including the
reinvestment of dividends and capital gains, if any.
2 Travelers Series Fund Inc. | 2004 Semi-Annual Report
Inc. While the portfolio's performance for the six-month period was quite
strong, some holdings detracted from performance. Two of the three biggest
detractors were holdings in the hard-hit technology sector -- memory chip
producer SanDisk Corp. and computer hard drive manufacturer Maxtor Corp. --
while another major detractor was biopharmaceutical company Chiron Corp./iii/
Smith Barney Mid Cap Core Portfolio
For the six months ended April 30, 2004, the fund returned 2.75%. The fund
underperformed the fund's unmanaged benchmark, the S&P MidCap 400 Index,/iv/
which returned 6.93% for the same period. The fund also lagged its Lipper
mid-cap growth variable funds category average, which returned 3.15%./3/
The main reason for the underperformance was the fund's reluctance to invest in
low-priced, high-volatility stocks. While these stocks appreciated strongly
over the last six months, the fund generally avoided investing in them due to
their high-risk nature. The fund focuses on stocks of higher-quality companies
with good fundamentals and favorable long-term outlooks, which we believe offer
better opportunities for long-term investors.
At the end of April, the sectors of the portfolio that were the most
overweighted versus the benchmark were industrials, technology and materials.
While we continue to emphasize these sectors, during the period we reduced the
portfolio's weighting in technology, specifically in the hardware area, in
favor of the industrial sector./v/
Our core philosophy continues to be based on investing in what we believe are
leading companies across a broad cross section of sectors and industries. Our
selection process focuses on companies that we perceive to have significant
advantages and excellent competitive positions in the marketplace.
Information About Your Fund
In recent months several issues in the mutual fund industry have come under the
scrutiny of federal and state regulators. The fund's Adviser and some of its
affiliates have received requests for information from various government
regulators regarding market timing, late trading, fees and other mutual fund
issues in connection with various investigations. The fund has been informed
that the Adviser and its affiliates are responding to those information
requests, but are not in a position to predict the outcome of these requests
and investigations.
/3/Lipper, Inc. is a major independent mutual-fund tracking organization.
Returns are based on the six-month period ended April 30, 2004, calculated
among the 1,000 funds in the fund's Lipper category including the
reinvestment of dividends and capital gains, if any.
3 Travelers Series Fund Inc. | 2004 Semi-Annual Report
As always, thank you for your continued confidence in our stewardship of your
assets. We look forward to helping you continue to meet your financial goals.
Sincerely,
/s/ R. Jay Gerken
R. Jay Gerken, CFA
Chairman, President and Chief Executive Officer
May 24, 2004
The information provided is not intended to be a forecast of future events, a
guarantee of future results or investment advice. Views expressed may differ
from those of the firm as a whole.
Portfolio holdings and breakdowns are as of April 30, 2004 and are subject to
change. Please refer to pages 5 through 13 for a list and percentage breakdown
of each fund's holdings.
All index performance reflects no deduction for fees, expenses or taxes. Please
note that an investor cannot invest directly in an index.
RISKS:
Smith Barney Aggressive Growth Portfolio: Keep in mind, the fund may invest a
significant portion of its assets in small- and mid-cap companies which may be
more volatile than an investment that focuses only on large-cap companies.
Smith Barney Mid Cap Core Portfolio: Mid-cap stocks may be more volatile than
large-cap stocks. Additionally, the fund's performance may be influenced by
political, social and economic factors affecting investments in companies in
foreign countries. The fund may use derivatives, such as options and futures,
which can be illiquid, may disproportionately increase losses, and have a
potentially large impact on fund performance.
/i/The S&P 500 Index is a market capitalization-weighted index of 500 widely
held common stocks.
/ii/The Russell 3000 Growth Index measures the performance of those Russell
3000 Index companies with higher price-to-book ratios and higher forecasted
growth values.
/iii/Portfolio holdings and breakdowns are as of April 30, 2004 and are subject
to change and may not be representative of the portfolio manager's current
or future investments. The fund's top ten holdings as of this date were:
Forest Laboratories, Inc. (5.37%); UnitedHealth Group Inc. (5.14%); Biogen
Idec Inc. (5.10%); Lehman Brothers Holdings Inc. (4.94%); Anadarko
Petroleum Corp. (4.90%); Chiron Corp. (4.17%); Amgen Inc. (4.09%); Comcast
Corp. Special Class A Shares (4.08%); Genzyme Corp. (3.69%); Weatherford
International Ltd. (3.63%). Please refer to pages 5 through 8 for a list
and percentage breakdown of the fund's holdings.
The mention of sector breakdowns is for informational purposes only and should
not be construed as a recommendation to purchase or sell any securities. The
information provided regarding such sectors is not a sufficient basis upon
which to make an investment decision. Investors seeking financial advice
regarding the appropriateness of investing in any securities or investment
strategies discussed should consult their financial professional. Portfolio
holdings are subject to change at any time and may not be representative of
the portfolio manager's current or future investments. The fund's top five
sector holdings as of April 30, 2004 were: Healthcare (37.8%); Consumer
Discretionary (14.4%); Information Technology (11.3%); Energy (9.9%);
Financials (9.7%). The fund's portfolio composition is subject to change at
any time.
/iv/The S&P MidCap 400 Index is a market-value weighted index which consists of
400 domestic stocks chosen for market size, liquidity, and industry group
representation.
/v/The mention of sector breakdowns is for informational purposes only and
should not be construed as a recommendation to purchase or sell any
securities. The information provided regarding such sectors is not a
sufficient basis upon which to make an investment decision. Investors
seeking financial advice regarding the appropriateness of investing in any
securities or investment strategies discussed should consult their financial
professional. Portfolio holdings are subject to change at any time and may
not be representative of the portfolio manager's current or future
investments. The fund's top five sector holdings as of April 30, 2004 were:
Industrials (19.1%); Consumer Discretionary (18.3%); Information Technology
(15.9%); Financials (15.2%); Healthcare (9.7%). The fund's portfolio
composition is subject to change at any time.
4 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) APRIL 30, 2004
SMITH BARNEY AGGRESSIVE GROWTH PORTFOLIO
SHARES SECURITY VALUE
- ------------------------------------------------------------------------------
COMMON STOCK -- 92.2%
COMMINGLED FUND -- 1.7%
Commingled Fund -- 1.7%
370,000 Nasdaq-100 Index Tracking Stock $ 12,850,100
- ------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 14.2%
Media -- 14.1%
1,068,275 Cablevision Systems Corp. -- NY Group, Class A Shares* 23,320,443
114,842 Comcast Corp., Class A Shares* 3,456,744
1,072,160 Comcast Corp., Special Class A Shares* 31,081,918
1,561,400 Liberty Media Corp., Series A Shares* 17,081,716
1,350,367 Time Warner Inc.* 22,713,173
274,699 Viacom Inc., Class B Shares 10,617,117
34,600 World Wrestling Entertainment, Inc. 476,096
- ------------------------------------------------------------------------------
108,747,207
- ------------------------------------------------------------------------------
Specialty Retail -- 0.1%
100,000 Charming Shoppes, Inc.* 706,000
- ------------------------------------------------------------------------------
TOTAL CONSUMER DISCRETIONARY 109,453,207
- ------------------------------------------------------------------------------
ENERGY -- 9.8%
Energy Equipment & Services -- 5.0%
165,800 Core Laboratories N.V.* 3,770,292
453,150 Grant Prideco, Inc.* 6,910,538
636,450 Weatherford International Ltd.* 27,672,846
- ------------------------------------------------------------------------------
38,353,676
- ------------------------------------------------------------------------------
Oil & Gas -- 4.8%
695,800 Anadarko Petroleum Corp. 37,280,964
- ------------------------------------------------------------------------------
TOTAL ENERGY 75,634,640
- ------------------------------------------------------------------------------
FINANCIALS -- 9.5%
Banks -- 1.3%
33,000 Astoria Financial Corp. 1,135,860
361,566 New York Community Bancorp, Inc. 9,064,459
- ------------------------------------------------------------------------------
10,200,319
- ------------------------------------------------------------------------------
Diversified Financials -- 8.2%
72,725 CIT Group Inc. 2,499,558
512,842 Lehman Brothers Holdings Inc. 37,642,603
429,400 Merrill Lynch & Co., Inc. 23,286,362
2,415 National Financial Partners Corp. 75,469
- ------------------------------------------------------------------------------
63,503,992
- ------------------------------------------------------------------------------
TOTAL FINANCIALS 73,704,311
- ------------------------------------------------------------------------------
See Notes to Financial Statements.
5 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
SMITH BARNEY AGGRESSIVE GROWTH PORTFOLIO
SHARES SECURITY VALUE
- --------------------------------------------------------------------------
HEALTHCARE -- 37.2%
Biotechnology -- 22.5%
1,400 Albany Molecular Research, Inc.* $ 22,708
162,500 Alkermes, Inc.* 2,491,125
553,745 Amgen Inc.* 31,159,231
658,806 Biogen Idec Inc.* 38,869,554
110,150 CancerVax Corp.* 1,153,271
683,850 Chiron Corp.* 31,730,640
43,200 Genentech, Inc.* 5,304,960
645,168 Genzyme Corp.* 28,103,518
310,775 ImClone Systems Inc.* 20,784,632
224,750 Isis Pharmaceuticals, Inc.* 1,633,932
663,905 Millennium Pharmaceuticals, Inc.* 9,951,936
2,300 Nabi Biopharmaceuticals * 37,605
173,000 Nanogen, Inc.* 1,012,050
800 Tularik Inc.* 19,736
229,400 Vertex Pharmaceuticals Inc.* 1,982,016
- --------------------------------------------------------------------------
174,256,914
- --------------------------------------------------------------------------
Healthcare Equipment & Supplies -- 0.4%
80,100 Biosite Inc.* 3,173,562
5,400 Cygnus, Inc.* 1,836
- --------------------------------------------------------------------------
3,175,398
- --------------------------------------------------------------------------
Healthcare Providers & Services -- 5.1%
636,000 UnitedHealth Group Inc. 39,101,280
- --------------------------------------------------------------------------
Pharmaceuticals -- 9.2%
633,800 Forest Laboratories, Inc.* 40,867,424
189,448 Johnson & Johnson 10,235,875
541,666 King Pharmaceuticals, Inc.* 9,343,739
62,189 Pfizer Inc. 2,223,879
34,288 Teva Pharmaceutical Industries Ltd., Sponsored ADR 2,110,769
280,000 Valeant Pharmaceuticals International 6,468,000
- --------------------------------------------------------------------------
71,249,686
- --------------------------------------------------------------------------
TOTAL HEALTHCARE 287,783,278
- --------------------------------------------------------------------------
INDUSTRIALS -- 6.0%
Aerospace & Defense -- 2.3%
293,800 L-3 Communications Holdings, Inc. 18,139,212
- --------------------------------------------------------------------------
Industrial Conglomerates -- 2.9%
812,412 Tyco International Ltd. 22,300,709
- --------------------------------------------------------------------------
Machinery -- 0.8%
245,000 Pall Corp. 5,826,100
- --------------------------------------------------------------------------
TOTAL INDUSTRIALS 46,266,021
- --------------------------------------------------------------------------
See Notes to Financial Statements.
6 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
SMITH BARNEY AGGRESSIVE GROWTH PORTFOLIO
SHARES SECURITY VALUE
- -----------------------------------------------------------
INFORMATION TECHNOLOGY -- 11.1%
Communications Equipment -- 3.1%
161,100 C-COR.net Corp.* $ 1,462,788
25,000 CEVA, Inc.* 201,750
115,000 DSP Group, Inc.* 2,849,700
760,000 Motorola, Inc. 13,870,000
384,325 Nokia Oyj, Sponsored ADR 5,384,393
- ----------------------------------------------------------
23,768,631
- ----------------------------------------------------------
Computers & Peripherals -- 1.5%
759,076 Maxtor Corp.* 4,941,585
242,000 Quantum Corp.* 757,460
260,000 SanDisk Corp.* 6,008,600
- ----------------------------------------------------------
11,707,645
- ----------------------------------------------------------
Electronic Equipment & Instruments -- 0.0%
12,400 Excel Technology, Inc.* 419,616
- ----------------------------------------------------------
Semiconductor Equipment & Products -- 5.3%
125,000 Cabot Microelectronics Corp.* 3,691,250
229,000 Cirrus Logic, Inc.* 1,426,670
115,000 Cree, Inc.* 2,133,250
297,334 Intel Corp. 7,650,404
1,279,300 Micron Technology, Inc.* 17,424,066
470,000 RF Micro Devices, Inc.* 3,459,200
10,300 Standard Microsystems Corp.* 245,552
241,091 Teradyne, Inc.* 4,913,435
- ----------------------------------------------------------
40,943,827
- ----------------------------------------------------------
Software -- 1.2%
92,000 Advent Software, Inc.* 1,718,560
100,000 Autodesk, Inc. 3,350,000
62,264 Microsoft Corp. 1,616,996
105,000 RSA Security Inc.* 1,682,100
75,000 Verity, Inc.* 930,000
- ----------------------------------------------------------
9,297,656
- ----------------------------------------------------------
TOTAL INFORMATION TECHNOLOGY 86,137,375
- ----------------------------------------------------------
TELECOMMUNICATION SERVICES -- 2.7%
Diversified Telecommunication Services -- 0.2%
71,000 AT&T Corp. 1,217,650
- ----------------------------------------------------------
See Notes to Financial Statements.
7 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
SMITH BARNEY AGGRESSIVE GROWTH PORTFOLIO
SHARES SECURITY VALUE
- -----------------------------------------------------------------------------------------------
Wireless Telecommunication Services -- 2.5%
1,409,360 AT&T Wireless Services Inc.* $ 19,463,262
- -----------------------------------------------------------------------------------------------
TOTAL TELECOMMUNICATION SERVICES 20,680,912
- -----------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $734,779,942) 712,509,844
- -----------------------------------------------------------------------------------------------
FACE
AMOUNT SECURITY VALUE
- -----------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 7.8%
$60,314,000 Merrill Lynch, Pierce, Fenner & Smith Inc. dated 4/30/04, 1.020% due
5/3/04; Proceeds at maturity -- $60,319,127; (Fully collateralized by
various U.S. Government Agency Obligations, 0.000% to 6.000% due
5/3/04 to 4/30/19; Market value -- $61,520,644)
(Cost -- $60,314,000) 60,314,000
- -----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.0%
(Cost -- $795,093,942**) $772,823,844
- -----------------------------------------------------------------------------------------------
* Non income producing security.
** Aggregate cost for Federal income tax purposes is substantially the same.
Abbreviation used in this schedule:
ADR -- American Depositary Receipt
See Notes to Financial Statements.
8 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
SMITH BARNEY MID CAP CORE PORTFOLIO
SHARES SECURITY VALUE
- -------------------------------------------------------------------
COMMON STOCK -- 98.0%
CONSUMER DISCRETIONARY -- 18.4%
Hotels, Restaurants & Leisure -- 2.6%
52,875 Boyd Gaming Corp. $ 1,242,562
18,075 CBRL Group, Inc. 678,716
18,680 Landry's Restaurants, Inc. 625,406
2,825 Station Casinos, Inc. 127,351
- -------------------------------------------------------------------
2,674,035
- -------------------------------------------------------------------
Household Durables -- 0.3%
12,350 D.R. Horton, Inc. 355,680
- -------------------------------------------------------------------
Leisure Equipment & Products -- 2.1%
113,740 Marvel Enterprises, Inc.* 2,159,923
- -------------------------------------------------------------------
Media -- 7.2%
16,075 The E.W. Scripps Co., Class A Shares 1,696,716
36,440 Emmis Communications Corp., Class A Shares* 852,696
59,425 Harte-Hanks, Inc. 1,423,823
74,730 Imax Corp.* 371,333
21,335 Meredith Corp. 1,086,805
8,375 Pixar, Inc.* 572,012
1,378 The Washington Post Co., Class B Shares 1,267,760
- -------------------------------------------------------------------
7,271,145
- -------------------------------------------------------------------
Specialty Retail -- 4.3%
18,080 CDW Corp. 1,129,819
52,980 PETsMART, Inc. 1,467,546
19,075 The Sports Authority, Inc.* 731,336
31,925 Williams-Sonoma, Inc.* 1,036,924
- -------------------------------------------------------------------
4,365,625
- -------------------------------------------------------------------
Textiles & Apparel -- 1.9%
21,166 Carter's, Inc.* 638,155
18,035 Coach, Inc.* 768,291
32,900 Tommy Hilfiger Corp.* 513,240
- -------------------------------------------------------------------
1,919,686
- -------------------------------------------------------------------
TOTAL CONSUMER DISCRETIONARY 18,746,094
- -------------------------------------------------------------------
CONSUMER STAPLES -- 3.5%
Food Products -- 2.4%
15,500 Dean Foods Co.* 520,490
27,590 The Hain Celestial Group, Inc.* 546,282
43,330 Hormel Foods Corp. 1,321,132
- -------------------------------------------------------------------
2,387,904
- -------------------------------------------------------------------
See Notes to Financial Statements.
9 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
SMITH BARNEY MID CAP CORE PORTFOLIO
SHARES SECURITY VALUE
----------------------------------------------------------
Personal Products -- 1.1%
24,612 Alberto-Culver Co., Class B Shares $ 1,160,702
----------------------------------------------------------
TOTAL CONSUMER STAPLES 3,548,606
----------------------------------------------------------
ENERGY -- 7.0%
Energy Equipment & Services -- 4.0%
26,750 GlobalSantaFe Corp. 705,398
24,680 Nabors Industries, Ltd.* 1,094,805
16,830 Smith International, Inc.* 921,442
29,550 Weatherford International Ltd.* 1,284,834
----------------------------------------------------------
4,006,479
----------------------------------------------------------
Oil & Gas -- 3.0%
29,355 Murphy Oil Corp. 2,010,818
20,360 Newfield Exploration Co.* 1,072,565
----------------------------------------------------------
3,083,383
----------------------------------------------------------
TOTAL ENERGY 7,089,862
----------------------------------------------------------
FINANCIALS -- 15.3%
Banks -- 5.7%
24,875 Banknorth Group, Inc. 761,921
18,790 Comerica Inc. 970,128
34,200 Investors Financial Services Corp. 1,329,354
37,970 National Commerce Financial Corp. 1,009,622
27,350 New York Community Bancorp, Inc. 685,664
18,110 Zions Bancorp. 1,023,577
----------------------------------------------------------
5,780,266
----------------------------------------------------------
Diversified Financials -- 2.2%
18,300 The Bear Stearns Cos. Inc. 1,466,562
62,960 Providian Financial Corp.* 763,705
----------------------------------------------------------
2,230,267
----------------------------------------------------------
Insurance -- 7.4%
29,485 Ambac Financial Group, Inc. 2,034,465
5,950 Everest Re Group, Ltd. 506,821
23,995 IPC Holdings, Ltd. 883,016
24,700 Lincoln National Corp. 1,108,536
36,360 Old Republic International Corp. 844,279
16,935 PartnerRe Ltd. 970,376
33,565 Willis Group Holdings Ltd. 1,218,745
----------------------------------------------------------
7,566,238
----------------------------------------------------------
TOTAL FINANCIALS 15,576,771
----------------------------------------------------------
See Notes to Financial Statements.
10 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
SMITH BARNEY MID CAP CORE PORTFOLIO
SHARES SECURITY VALUE
------------------------------------------------------------------------
HEALTHCARE -- 9.8%
Biotechnology -- 1.8%
22,490 Gilead Sciences, Inc.* $ 1,368,067
6,625 OSI Pharmaceuticals, Inc.* 488,859
------------------------------------------------------------------------
1,856,926
------------------------------------------------------------------------
Healthcare Equipment & Supplies -- 2.4%
32,715 DENTSPLY International Inc. 1,585,369
9,675 Varian Medical Systems, Inc.* 830,502
------------------------------------------------------------------------
2,415,871
------------------------------------------------------------------------
Healthcare Providers & Services -- 2.2%
28,250 Sierra Health Services, Inc.* 1,049,488
27,450 Universal Health Services, Inc., Class B Shares* 1,205,055
------------------------------------------------------------------------
2,254,543
------------------------------------------------------------------------
Pharmaceuticals -- 3.4%
50,710 Medicis Pharmaceutical Corp., Class A Shares 2,176,473
50,570 NPS Pharmaceuticals, Inc.* 1,266,778
------------------------------------------------------------------------
3,443,251
------------------------------------------------------------------------
TOTAL HEALTHCARE 9,970,591
------------------------------------------------------------------------
INDUSTRIALS -- 19.2%
Aerospace & Defense -- 1.4%
24,545 Alliant Techsystems Inc.* 1,455,273
------------------------------------------------------------------------
Airlines -- 0.3%
11,125 JetBlue Airways Corp.* 307,940
------------------------------------------------------------------------
Building Products -- 1.5%
14,445 American Standard Cos. Inc.* 1,519,470
------------------------------------------------------------------------
Commercial Services & Supplies -- 4.0%
68,925 Allied Waste Industries, Inc.* 867,766
22,530 DST Systems, Inc.* 994,699
31,730 Manpower Inc. 1,488,137
19,225 Sylvan Learning Systems, Inc.* 677,681
------------------------------------------------------------------------
4,028,283
------------------------------------------------------------------------
Construction & Engineering -- 0.8%
18,685 Jacobs Engineering Group Inc.* 779,351
------------------------------------------------------------------------
Electrical Equipment -- 1.2%
36,505 Rockwell Automation, Inc. 1,193,348
------------------------------------------------------------------------
Industrial Conglomerates -- 1.3%
21,815 Carlisle Cos. Inc. 1,292,539
------------------------------------------------------------------------
See Notes to Financial Statements.
11 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
SMITH BARNEY MID CAP CORE PORTFOLIO
SHARES SECURITY VALUE
- ------------------------------------------------------------------
Machinery -- 4.3%
19,455 Eaton Corp. $ 1,155,238
19,730 Kennametal Inc. 851,547
21,955 Navistar International Corp.* 991,268
57,020 Pall Corp. 1,355,936
- ------------------------------------------------------------------
4,353,989
- ------------------------------------------------------------------
Road & Rail -- 2.9%
36,635 C.H. Robinson Worldwide, Inc. 1,503,500
60,625 Heartland Express Inc. 1,488,344
- ------------------------------------------------------------------
2,991,844
- ------------------------------------------------------------------
Trading Companies & Distributors -- 1.5%
28,820 Fastenal Co. 1,581,353
- ------------------------------------------------------------------
TOTAL INDUSTRIALS 19,503,390
- ------------------------------------------------------------------
INFORMATION TECHNOLOGY -- 16.0%
Communications Equipment -- 1.7%
94,260 3Com Corp.* 580,642
33,600 Avaya Inc.* 459,648
89,600 JDS Uniphase Corp.* 272,384
20,500 Juniper Networks, Inc.* 448,540
- ------------------------------------------------------------------
1,761,214
- ------------------------------------------------------------------
Computers & Peripherals -- 1.1%
44,770 Electronics for Imaging, Inc.* 1,136,263
- ------------------------------------------------------------------
Electronic Equipment & Instruments -- 2.8%
38,680 Celestica Inc., Subordinate Voting Shares* 679,994
16,380 Diebold, Inc. 754,954
48,525 Thermo Electron Corp.* 1,416,930
- ------------------------------------------------------------------
2,851,878
- ------------------------------------------------------------------
Semiconductor Equipment & Products -- 3.1%
21,865 Actel Corp.* 435,551
26,850 Cymer, Inc.* 858,663
98,665 Integrated Device Technology, Inc.* 1,327,044
13,325 International Rectifier Corp.* 528,203
- ------------------------------------------------------------------
3,149,461
- ------------------------------------------------------------------
Software -- 7.3%
28,205 Amdocs Ltd.* 748,843
24,675 BEA Systems, Inc.* 281,542
40,540 Mercury Interactive Corp.* 1,724,977
101,025 Quest Software, Inc.* 1,136,531
79,270 Siebel Systems, Inc.* 814,896
35,400 Synopsys, Inc.* 946,242
33,800 THQ Inc.* 626,652
See Notes to Financial Statements.
12 Travelers Series Fund Inc. | 2004 Semi-Annual Report
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2004
SMITH BARNEY MID CAP CORE PORTFOLIO
SHARES SECURITY VALUE
- ----------------------------------------------------------------------------------------
Software -- 7.3% (continued)
41,150 VERITAS Software Corp.* $ 1,097,470
- ----------------------------------------------------------------------------------------
7,377,153
- ----------------------------------------------------------------------------------------
TOTAL INFORMATION TECHNOLOGY 16,275,969
- ----------------------------------------------------------------------------------------
MATERIALS -- 5.9%
Chemicals -- 0.5%
9,675 Minerals Technologies Inc. 567,439
- ----------------------------------------------------------------------------------------
Containers & Packaging -- 1.9%
111,810 Smurfit-Stone Container Corp.* 1,922,014
- ----------------------------------------------------------------------------------------
Metals & Mining -- 1.8%
23,895 Compass Minerals International, Inc. 391,878
33,875 Glamis Gold Ltd.* 487,800
16,285 Inco Ltd.* 468,194
32,725 Placer Dome Inc. 458,150
- ----------------------------------------------------------------------------------------
1,806,022
- ----------------------------------------------------------------------------------------
Paper & Forest Products -- 1.7%
41,695 Bowater Inc. 1,749,105
- ----------------------------------------------------------------------------------------
TOTAL MATERIALS 6,044,580
- ----------------------------------------------------------------------------------------
UTILITIES -- 2.9%
Electric Utilities -- 0.8%
25,710 Wisconsin Energy Corp. 807,294
- ----------------------------------------------------------------------------------------
Gas Utilities -- 0.9%
46,725 Southern Union Co.* 918,614
- ----------------------------------------------------------------------------------------
Water Utilities -- 1.2%
59,321 Aqua America, Inc. 1,213,114
- ----------------------------------------------------------------------------------------
TOTAL UTILITIES 2,939,022
- ----------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost -- $91,881,147) 99,694,885
- ----------------------------------------------------------------------------------------
FACE
AMOUNT SECURITY VALUE
- ----------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 2.0%
$2,004,000 UBS Securities LLC dated 4/30/04, 0.920% due 5/3/04; Proceeds at
maturity -- $2,004,154; (Fully collateralized by U.S. Treasury
Inflationary Index Notes, 3.000% due 7/15/12;
Market value -- $2,044,093) (Cost -- $2,004,000) 2,004,000
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.0%
(Cost -- $93,885,147**) $101,698,885
- ----------------------------------------------------------------------------------------
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is substantially the same.
See Notes to Financial Statements.
13 Travelers Series Fund Inc. | 2004 Semi-Annual Report
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) APRIL 30, 2004
Smith Barney Smith Barney
Aggressive Growth Mid Cap Core
Portfolio Portfolio
- --------------------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost -- $795,093,942 and
$93,885,147, respectively) $772,823,844 $101,698,885
Cash 162 662
Dividends and interest receivable 118,668 33,409
Receivable for Fund shares sold 50,799 74,913
Receivable for securities sold -- 737,361
Prepaid expenses 232 102
Other receivables 61,715 5,910
- -------------------------------------------------------------------------------------------
Total Assets 773,055,420 102,551,242
- -------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 11,064,180 157,021
Management fees payable 514,928 64,636
Payable for Fund shares reacquired 3,486 15,345
Accrued expenses 38,453 16,849
- -------------------------------------------------------------------------------------------
Total Liabilities 11,621,047 253,851
- -------------------------------------------------------------------------------------------
Total Net Assets $761,434,373 $102,297,391
- -------------------------------------------------------------------------------------------
NET ASSETS:
Par value of capital shares $ 619 $ 81
Capital paid in excess of par value 789,150,504 97,101,675
Accumulated net investment loss (1,600,662) (22,612)
Accumulated net realized loss from investment
transactions and futures contracts (3,845,990) (2,595,491)
Net unrealized appreciation (depreciation) of investments (22,270,098) 7,813,738
- -------------------------------------------------------------------------------------------
Total Net Assets $761,434,373 $102,297,391
- -------------------------------------------------------------------------------------------
Shares Outstanding 61,881,172 8,061,213
- -------------------------------------------------------------------------------------------
Net Asset Value $12.30 $12.69
- -------------------------------------------------------------------------------------------
See Notes to Financial Statements.
14 Travelers Series Fund Inc. | 2004 Semi-Annual Report
STATEMENTS OF OPERATIONS (UNAUDITED)
For the Six Months Ended April 30, 2004
Smith Barney Smith Barney
Aggressive Growth Mid Cap Core
Portfolio Portfolio
----------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 323,653 $ 15,619
Dividends 1,045,415 366,595
Less: Foreign withholding tax (21,365) (309)
----------------------------------------------------------------------------
Total Investment Income 1,347,703 381,905
----------------------------------------------------------------------------
EXPENSES:
Management fees (Note 2) 2,873,950 365,581
Shareholder communications 22,312 4,814
Custody 18,393 14,868
Audit and legal 14,705 11,341
Directors' fees 10,962 2,822
Transfer agency services 2,490 2,474
Other 5,553 2,617
----------------------------------------------------------------------------
Total Expenses 2,948,365 404,517
----------------------------------------------------------------------------
Net Investment Loss (1,600,662) (22,612)
----------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FUTURES CONTRACTS
(NOTES 3 AND 5):
Realized Gain From:
Investment transactions 2,311,847 6,286,828
Futures contracts -- 101,477
----------------------------------------------------------------------------
Net Realized Gain 2,311,847 6,388,305
----------------------------------------------------------------------------
Change in Net Unrealized Appreciation
(Depreciation) of Investments:
Beginning of period (68,823,293) 12,108,416
End of period (22,270,098) 7,813,738
----------------------------------------------------------------------------
Change in Net Unrealized (Appreciation)
Depreciation 46,553,195 (4,294,678)
----------------------------------------------------------------------------
Net Gain on Investments and Futures Contracts 48,865,042 2,093,627
----------------------------------------------------------------------------
Increase in Net Assets From Operations $ 47,264,380 $ 2,071,015
----------------------------------------------------------------------------
See Notes to Financial Statements.
15 Travelers Series Fund Inc. | 2004 Semi-Annual Report
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended April 30, 2004 (unaudited)
and the Year Ended October 31, 2003
Smith Barney Aggressive Growth Portfolio 2004 2003
- -----------------------------------------------------------------------------------
OPERATIONS:
Net investment loss $ (1,600,662) $ (2,399,272)
Net realized gain (loss) 2,311,847 (3,239,861)
Decrease in net unrealized depreciation 46,553,195 117,888,578
- ---------------------------------------------------------------------------------
Increase in Net Assets From Operations 47,264,380 112,249,445
- ---------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 94,937,784 113,070,096
Cost of shares reacquired (4,651,670) (16,650,404)
- ---------------------------------------------------------------------------------
Increase in Net Assets From Fund Share Transactions 90,286,114 96,419,692
- ---------------------------------------------------------------------------------
Increase in Net Assets 137,550,494 208,669,137
NET ASSETS:
Beginning of period 623,883,879 415,214,742
- ---------------------------------------------------------------------------------
End of period* $761,434,373 $623,883,879
- ---------------------------------------------------------------------------------
* Includes accumulated net investment loss of: $(1,600,662) --
- ---------------------------------------------------------------------------------
See Notes to Financial Statements.
16 Travelers Series Fund Inc. | 2004 Semi-Annual Report
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
For the Six Months Ended April 30, 2004 (unaudited)
and the Year Ended October 31, 2003
Smith Barney Mid Cap Core Portfolio 2004 2003
- ------------------------------------------------------------------------------------
OPERATIONS:
Net investment loss $ (22,612) $ (17,304)
Net realized gain 6,388,305 2,012,052
Increase (decrease) in net unrealized appreciation (4,294,678) 12,637,664
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 2,071,015 14,632,412
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 14,748,525 18,586,469
Cost of shares reacquired (1,380,495) (3,004,974)
- --------------------------------------------------------------------------------
Increase in Net Assets From Fund Share Transactions 13,368,030 15,581,495
- --------------------------------------------------------------------------------
Increase in Net Assets 15,439,045 30,213,907
NET ASSETS:
Beginning of period 86,858,346 56,644,439
- --------------------------------------------------------------------------------
End of period* $102,297,391 $86,858,346
- --------------------------------------------------------------------------------
* Includes accumulated net investment loss of: $(22,612) --
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
17 Travelers Series Fund Inc. | 2004 Semi-Annual Report
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Significant Accounting Policies
The Smith Barney Aggressive Growth Portfolio and Smith Barney Mid Cap Core
Portfolio ("Fund(s)") are separate diversified investment funds of the
Travelers Series Fund Inc. ("Company"). The Company, a Maryland corporation, is
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company and consists of these Funds and thirteen other
separate investment funds: Smith Barney Large Cap Value Portfolio, Strategic
Equity Portfolio, Van Kampen Enterprise Portfolio, Smith Barney International
All Cap Growth Portfolio, Travelers Managed Income Portfolio, Pioneer Strategic
Income Portfolio, Salomon Brothers Strategic Total Return Bond Portfolio, Smith
Barney High Income Portfolio, MFS Total Return Portfolio, Smith Barney Money
Market Portfolio, AIM Capital Appreciation Portfolio, Smith Barney Large
Capitalization Growth Portfolio and SB Adjustable Rate Income Portfolio. Shares
of the Fund are offered only to insurance company separate accounts that fund
certain variable annuity and variable life insurance contracts. The financial
statements and financial highlights for the other funds are presented in
separate shareholder reports.
The following are significant accounting policies consistently followed by the
Funds and are in conformity with generally accepted accounting principle
("GAAP"): (a) security transactions are accounted for on trade date; (b)
securities traded on national securities markets are valued at the closing
prices in the primary exchange on which they are traded; securities traded in
the over-the-counter market and listed securities for which no sales prices
were reported and U.S. government agencies and obligations are valued at the
mean between the bid and asked prices; securities listed on the NASDAQ National
Market System for which market quotations are available are valued at the
official closing price or, if there is no official closing price on that day,
at the last sale price; (c) securities maturing within 60 days are valued at
cost plus accreted discount, or minus amortized premium, which approximates
value; (d) securities for which market quotations are not available will be
valued in good faith at fair value by or under the direction of the Board of
Directors; (e) interest income, adjusted for amortization of premium and
accretion of discount, is recorded on an accrual basis; (f) dividend income is
recorded on the ex-dividend date; foreign dividends are recorded on the
ex-dividend date or as soon as practical after the Funds determine the
existence of a dividend declaration after exercising reasonable due
18 Travelers Series Fund Inc. | 2004 Semi-Annual Report
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
diligence; (g) dividends and distributions to shareholders are recorded on the
ex-dividend date; the Funds distribute dividends and capital gains, if any, at
least annually; (h) gains or losses on the sale of securities are calculated by
using the specific identification method; (i) the accounting records of the
Funds are maintained in U.S. dollars. All assets and liabilities denominated in
foreign currencies are translated into U.S. dollars based on the rate of
exchange of such currencies against U.S. dollars on the date of valuation.
Purchases and sales of securities, and income and expenses are translated at
the rate of exchange quoted on the respective date that such transactions are
recorded. Differences between income or expense amounts recorded and collected
or paid are adjusted when reported by the custodian; (j) the character of
income and gains to be distributed is determined in accordance with income tax
regulations which may differ from U.S. generally accepted accounting
principles; (k) the Funds intend to comply with the applicable provisions of
the Internal Revenue Code of 1986, as amended, pertaining to regulated
investment companies and to make distributions of taxable income sufficient to
relieve it from substantially all Federal income and excise taxes; and (l)
estimates and assumptions are required to be made regarding assets, liabilities
and changes in net assets resulting from operations when financial statements
are prepared. Changes in the economic environment, financial markets and any
other parameters used in determining these estimates could cause actual results
to differ.
2. Management Agreement and Transactions with Affiliated Persons
Smith Barney Fund Management LLC ("SBFM"), an indirect wholly-owned subsidiary
of Citigroup Inc. ("Citigroup") acts as investment manager of the Smith Barney
Aggressive Growth Portfolio ("SBAG") and Smith Barney Mid Cap Core Portfolio
("SBMCC"). SBAG and SBMCC pay SBFM a management fee calculated at the annual
rates of 0.80% and 0.75%, respectively, of the average daily net assets of each
Fund. These fees are calculated daily and paid monthly.
Citicorp Trust Bank, fsb. ("CTB"), another subsidiary of Citigroup, acts as the
Funds' transfer agent and PFPC Inc. ("PFPC") acts as the Funds' sub-transfer
agent. CTB receives account fees and asset-based fees that vary according to
the size and type of account. PFPC is responsible for shareholder recordkeeping
and financial processing for all shareholder accounts and is paid by CTB. For
the six
19 Travelers Series Fund Inc. | 2004 Semi-Annual Report
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
months ended April 30, 2004, each Fund paid transfer agent fees of $2,500 to
CTB.
For the six months ended April 30, 2004, Citigroup Global Markets Inc. ("CGM"),
another indirect wholly-owned subsidiary of Citigroup, received brokerage
commissions totaling $5,383.
Most of the officers and one Director of the Company are employees of Citigroup
or its affiliates.
3. Investments
During the six months ended April 30, 2004, the aggregate cost of purchases and
proceeds from sales of investments (including maturities of long-term
investments, but excluding short-term investments) were as follows:
SBAG SBMCC
- -----------------------------------------------------------------
Purchases $115,791,535 $70,072,518
- ----------------------------------------------------------------
Sales 9,146,362 55,250,060
- ----------------------------------------------------------------
At April 30, 2004, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
SBAG SBMCC
- --------------------------------------------------------------------
Gross unrealized appreciation $ 106,288,449 $11,272,885
Gross unrealized depreciation (128,558,547) (3,459,147)
- -------------------------------------------------------------------
Net unrealized appreciation
(depreciation) $ (22,270,098) $ 7,813,738
- -------------------------------------------------------------------
4. Repurchase Agreements
When entering into repurchase agreements, it is the Funds' policy that a
custodian takes possession of the underlying collateral securities, the value
of which at least equals the principal amount of the repurchase transaction,
including accrued interest. To the extent that any repurchase transaction
exceeds one business day, the value of the collateral is marked-to-market to
ensure the adequacy of the collateral. If the seller defaults and the value of
the collateral declines or if bankruptcy proceedings are commenced with respect
to the seller of the security, realization of the collateral by the Funds may
be delayed or limited.
20 Travelers Series Fund Inc. | 2004 Semi-Annual Report
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
5. Futures Contracts
Securities or cash equal to the initial margin amount are either deposited with
the broker or segregated by the custodian upon entering into the futures
contract. Additional securities are also segregated up to the current market
value of the futures contract. During the period the futures contract is open,
changes in the value of the contract are recognized as unrealized gains or
losses by "marking-to-market" on a daily basis to reflect the market value of
the contract at the end of each day's trading. Variation margin payments are
received or made and recognized as assets due from or liabilities due to
broker, depending upon whether unrealized gains or losses are incurred. When
the contract is closed, the Funds record a realized gain or loss equal to the
difference between the proceeds from (or cost of ) the closing transactions and
the Fund's basis in the contract. The Funds enter into such contracts typically
to hedge a portion of their portfolio. The Funds bear the market risk that
arise from changes in the value of the financial instruments and securities
indices.
At April 30, 2004, SBAG and SBMCC did not hold any futures contracts.
6. Capital Shares
At April 30, 2004, the Company had six billion shares of capital stock
authorized with a par value of $0.00001 per share. Each share of a Fund
represents an equal proportionate interest in that Fund with each other share
of the same Fund and has an equal entitlement to any dividends and
distributions made by the Fund.
Transactions in shares of each Fund were as follows:
Six Months Ended Year Ended
April 30, 2004 October 31, 2003
--------------------------------------------------------------------------
Smith Barney Aggressive Growth Portfolio
Shares sold 7,692,738 10,654,092
Shares reacquired (375,280) (1,773,901)
--------------------------------------------------------------------------
Net Increase 7,317,458 8,880,191
--------------------------------------------------------------------------
Smith Barney Mid Cap Core Portfolio
Shares sold 1,137,888 1,721,743
Shares reacquired (107,396) (298,046)
--------------------------------------------------------------------------
Net Increase 1,030,492 1,423,697
--------------------------------------------------------------------------
7. Additional Information
The Funds have received the following information from Citigroup Asset
Management ("CAM"), the Citigroup business unit which includes the Funds'
21 Travelers Series Fund Inc. | 2004 Semi-Annual Report
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Investment Manager and other investment advisory companies, all of which are
indirect, wholly-owned subsidiaries of Citigroup. CAM is reviewing its entry,
through an affiliate, into the transfer agent business in the period 1997-1999.
As CAM currently understands the facts, at the time CAM decided to enter the
transfer agent business, CAM sub-contracted for a period of five years certain
of the transfer agency services to a third party and also concluded a revenue
guarantee agreement with this sub-contractor providing that the sub-contractor
would guarantee certain benefits to CAM or its affiliates (the "Revenue
Guarantee Agreement"). In connection with the subsequent purchase of the
sub-contractor's business by an affiliate of the current sub-transfer agent
(PFPC Inc.) used by CAM on many of the funds it manages, this Revenue Guarantee
Agreement was amended eliminating those benefits in exchange for arrangements
that included a one-time payment from the sub-contractor.
The Boards of CAM-managed funds (the "Boards") were not informed of the Revenue
Guarantee Agreement with the sub-contractor at the time the Boards considered
and approved the transfer agent arrangements. Nor were the Boards informed of
the subsequent amendment to the Revenue Guarantee Agreement when that occurred.
CAM has begun to take corrective actions. CAM will pay to the applicable funds
approximately $17 million (plus interest) that CAM and its affiliates received
from the Revenue Guarantee Agreement and its amendment. CAM also plans an
independent review to verify that the transfer agency fees charged by CAM were
fairly priced as compared to competitive alternatives. CAM is instituting new
procedures and making changes designed to ensure no similar arrangements are
entered into in the future.
CAM has briefed the SEC, the New York State Attorney General and other
regulators with respect to this matter, as well as the U.S. Attorney who is
investigating the matter. CAM is cooperating with governmental authorities on
this matter, the ultimate outcome of which is not yet determinable.
22 Travelers Series Fund Inc. | 2004 Semi-Annual Report
FINANCIAL HIGHLIGHTS
For a share of capital stock outstanding throughout the year ended October 31,
unless otherwise noted:
Smith Barney
Aggressive Growth Portfolio 2004/(1)/ 2003 2002 2001 2000/(2)(3)/
- --------------------------------------------------------------------------------------------
Net Asset Value, Beginning of
Period $11.43 $ 9.09 $12.32 $15.03 $10.00
- -------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment loss (0.03) (0.04) (0.05) (0.05) (0.03)
Net realized and unrealized gain
(loss) 0.90 2.38 (3.18) (2.66) 5.07
- -------------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.87 2.34 (3.23) (2.71) 5.04
- -------------------------------------------------------------------------------------------
Less Distributions From:
Capital -- -- -- -- (0.01)
- -------------------------------------------------------------------------------------------
Total Distributions -- -- -- -- (0.01)
- -------------------------------------------------------------------------------------------
Net Asset Value, End of Period $12.30 $11.43 $ 9.09 $12.32 $15.03
- -------------------------------------------------------------------------------------------
Total Return/(4)/ 7.61%++ 25.74% (26.22)% (18.03)% 50.41%
- -------------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $761,434 $623,884 $415,215 $366,294 $164,553
- -------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses/(5)/ 0.82%+ 0.82% 0.83% 0.84% 0.99%
Net investment loss (0.45)+ (0.49) (0.50) (0.40) (0.21)
- -------------------------------------------------------------------------------------------
Portfolio Turnover Rate 1% 0% 9% 3% 0%
- -------------------------------------------------------------------------------------------
(1) For the six months ended April 30, 2004 (unaudited).
(2) For the period November 1, 1999 (commencement of operations) to October
31, 2000.
(3) Per share amounts have been calculated using the monthly average shares
method.
(4) Total returns do not reflect expenses associated with the separate account
such as administrative fees, account charges and surrender charges which,
if reflected would reduce the total returns for all periods shown.
(5) As a result of a voluntary expense limitation, the expense ratio will not
exceed 1.00%.
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
23 Travelers Series Fund Inc. | 2004 Semi-Annual Report
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share of capital stock outstanding throughout the year ended October 31,
unless otherwise noted:
Smith Barney
Mid Cap Core Portfolio 2004/(1)/ 2003 2002 2001 2000/(2)/
- ----------------------------------------------------------------------------------------
Net Asset Value, Beginning of
Period $12.35 $10.10 $10.83 $14.22 $10.00
- --------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (loss)/(3)/ (0.00)* (0.00)* (0.02) 0.02 0.06
Net realized and unrealized gain
(loss) 0.34 2.25 (0.70) (3.36) 4.17
- --------------------------------------------------------------------------------------
Total Income (Loss) From Operations 0.34 2.25 (0.72) (3.34) 4.23
- --------------------------------------------------------------------------------------
Less Distributions From:
Net investment income -- -- (0.01) (0.05) (0.01)
- --------------------------------------------------------------------------------------
Total Distributions -- -- (0.01) (0.05) (0.01)
- --------------------------------------------------------------------------------------
Net Asset Value, End of Period $12.69 $12.35 $10.10 $10.83 $14.22
- --------------------------------------------------------------------------------------
Total Return/(4)/ 2.75%++ 22.28% (6.64)% (23.56)% 42.36%
- --------------------------------------------------------------------------------------
Net Assets, End of Period (000s) $102,297 $86,858 $56,644 $34,376 $17,498
- --------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses/(3)(5)/ 0.83%+ 0.85% 0.90% 0.95% 0.95%
Net investment income (loss) (0.05)+ (0.03) (0.10) 0.25 0.72
- --------------------------------------------------------------------------------------
Portfolio Turnover Rate 59% 98% 79% 45% 61%
- --------------------------------------------------------------------------------------
(1) For the six months ended April 30, 2004 (unaudited).
(2) For the period November 1, 1999 (commencement of operations) to October 31,
2000.
(3) The manager agreed to waive a portion of its management fee for the year
ended October 31, 2001 and the period ended October 31, 2000. If such fees
were not waived, the per share decreases to net investment income and the
actual expense ratios would have been as follows:
Per Share Decreases to Expense Ratios
Net Investment Income Without Fee Waivers
---------------------- -------------------
2001 $0.00* 0.96%
2000 0.04 1.46
(4) Performance figures may reflect fee waivers and/or expense reimbursements.
Past performance is no guarantee of future results. In the absence of fee
waivers and/or expense reimbursements, the total return would be reduced.
Total returns do not reflect expenses associated with the separate account
such as administrative fees, account charges and surrender charges which,
if reflected would reduce the total returns for all periods shown.
(5) As a result of a voluntary expense limitation, the expense ratio will not
exceed 0.95%.
* Amount represents less than $0.01 per share.
++ Total return is not annualized, as it may not be representative of the total
return for the year.
+ Annualized.
24 Travelers Series Fund Inc. | 2004 Semi-Annual Report
TRAVELERS SERIES
FUND INC.
DIRECTORS INVESTMENT MANAGER
Abraham E. Cohen Smith Barney Fund Management LLC
Robert A. Frankel
Michael E. Gellert CUSTODIAN
R. Jay Gerken, CFA State Street Bank and
Chairman Trust Company
Rainer Greeven
Susan M. Heilbron ANNUITY
ADMINISTRATION
OFFICERS Travelers Annuity Investor Services
R. Jay Gerken, CFA One Cityplace
President and Chief Hartford, CT 06103-3415
Executive Officer
Andrew B. Shoup
Senior Vice President
and Chief Administrative
Officer
Richard A. Freeman
Vice President and
Investment Officer
Lawrence B. Weissman, CFA
Vice President and
Investment Officer
Kaprel Ozsolak
Controller
Andrew Beagley
Chief Anti-Money
Laundering Compliance
Officer
Robert I. Frenkel
Secretary and
Chief Legal Officer
Travelers Series Fund Inc.
Smith Barney Aggressive Growth Portfolio
Smith Barney Mid Cap Core Portfolio
The Funds are separate investment funds of the Travelers Series Fund Inc., a
Maryland corporation.
A description of the policies and procedures that the Funds use to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by telephoning the Funds (toll-free) at 1-800-451-2010
and by visiting the SEC's web site at www.sec.gov.
This report is submitted for the general information of the shareholders of
the Travelers Series Fund Inc. -- Smith Barney Aggressive Growth Portfolio
and Smith Barney Mid Cap Core Portfolio.
TRAVELERS SERIES FUND INC.
125 Broad Street
10th Floor, MF-2
New York, New York 10004
IN0896 6/04 04-6792
ITEM 2. CODE OF ETHICS.
Not Applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not Applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and
principal financial officer have concluded that the
registrant's disclosure controls and procedures (as
defined in Rule 30a- 3(c) under the Investment Company
Act of 1940, as amended (the "1940 Act")) are effective
as of a date within 90 days of the filing date of this
report that includes the disclosure required by this
paragraph, based on their evaluation of the disclosure
controls and procedures required by Rule 30a-3(b) under
the 1940 Act and 15d-15(b) under the Securities Exchange
Act of 1934.
(b) There were no changes in the registrant's internal
control over financial reporting (as defined in Rule
30a-3(d) under the 1940 Act) that occurred during the
registrant's last fiscal half-year (the registrant's
second fiscal half-year in the case of an annual report)
that have materially affected, or are likely to
materially affect the registrant's internal control over
financial reporting.
ITEM 10. EXHIBITS.
(a) Not applicable.
(b) Attached hereto.
Exhibit 99.CERT Certifications pursuant to section 302
of the Sarbanes-Oxley Act of 2002
Exhibit 99.906CERT Certifications pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this Report
to be signed on its behalf by the undersigned, there unto duly authorized.
TRAVELERS SERIES FUND INC.
By: /s/ R. Jay Gerken
--------------------------------
(R. Jay Gerken)
Chief Executive Officer of
Travelers Series Fund Inc.
Date: July 6, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ R. Jay Gerken
--------------------------------
(R. Jay Gerken)
Chief Executive Officer of
Travelers Series Fund Inc.
Date: July 6, 2004
By: /s/ Andrew B. Shoup
--------------------------------
(Andrew B. Shoup)
Chief Administrative Officer of
Travelers Series Fund Inc.
Date: July 6, 2004